Thursday, August 5, 2010

U.S. Postal Service and Fannie Mae Losses Billions

UPDATE 1-US Postal Service loses $3.5 bln in third quarter | Reuters

The U.S. Postal Service reported a quarterly net loss of $3.5 billion on Thursday and said it will likely have a cash shortfall going into 2011.

The agency, which delivers nearly half the world's mail, has reported net losses in 14 of the last 16 fiscal quarters.

Revenue in the third quarter that ended June 30 fell $294 million to $16 billion from a year ago, while expenses were $789 million higher at $19.5 billion, due largely to higher workers' compensation costs and retiree health benefits.

"Given current trends, we will not be able to pay all 2011 obligations," said Joseph Corbett, the agency's chief financial officer.

Mail Carriers waiting to deliver the mail.

Fannie Mae, the mortgage-finance company operating under federal conservatorship, is seeking $1.5 billion in aid from the U.S. Treasury Department after a 12th straight quarterly loss.

Fannie Mae had a loss of $1.2 billion in the second quarter, compared with a loss of $14.8 billion in the same period a year earlier, it said today in a filing to the Securities and Exchange Commission. The Washington-based company posted more than $147 billion in losses in the preceding 11 quarters, according to data compiled by Bloomberg.

The Treasury Department seized Fannie Mae and McLean, Virginia-based Freddie Mac, the biggest sources of U.S. mortgage funding, in September of 2008 and has spent $145 billion already to keep them solvent. In April, the Treasury and Department of Housing and Urban Development asked for public comment on how to fix the funding system after the companies’ losses on subprime mortgages pushed them to the brink of collapse.
The government-sponsored enterprises own or guarantee more than half the $11 trillion U.S. residential debt market. Freddie hasn’t yet disclosed second-quarter results.

Change you can believe in.

President Barack Obama has repeatedly claimed that his budget would cut the deficit by half by the end of his term. But as Heritage analyst Brian Riedl has pointed out, given
that Obama has already helped quadruple the deficit with his stimulus
package, pledging to halve it by 2013 is hardly ambitious.
The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.

Remember According to President Obama, President Bush got us in this situation. President had noting to do with it.

Bernanke, debt limit, budget deficit, dollar

More post from Wag This Dog.
President Obama Grew Deficit by $181 billion in July.
US economy rebounds growth dismal and poor.
Democrats say, Bush likely to pay.

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